A secret $37m budget blowout in Melbourne’s overhaul of the Queen Victoria Market (QVM) can finally be revealed, nearly four years after it was covertly approved by council.

The QVM’s precinct renewal program – a multi-year effort to upgrade ageing vendor facilities – was originally allocated a $308m budget in 2017 before being reduced to $268m in 2020 during the peak of pandemic-era cost-cutting measures.

But in December 2022 the budget was restored to a higher $305.6m figure to “support delivery of the full scope” of the renewal.

However, ratepayers were never told about the 2022 increase, with upcoming council meeting papers disclosing that Town Hall spent nearly four years presenting progress updates to ratepayers based on that defunct $268m funding limit.

Council has justified keeping the subsequent $37.6m budget blowout confidential by citing local government laws that allow commercial details to be suppressed “which could have prejudiced Council’s commercial position”.

Friends of Queen Victoria Market president Mary-Lou Howie said “Melburnians deserve to know exactly what benchmark” the council was using.

“Council approved a $305.6 million budget in 2022 but continued publicly reporting against a superseded $268 million figure. Four years later, major works remain unfinished,” Ms Howie said.

“Melburnians still have not been told what the complete renewal will cost, when it will be finished, or what has been added or removed from the original program.

“Council has become very good at reporting what it built and what it spent, but it still has not shown whether it delivered what it promised.”

The newly released financial reconciliation shows that the city has already spent $237.6m of the $305.6m total, approximately 78 per cent of the total budget across more than a decade of works.

Completed works to date include the extensive structural restoration of the market’s iconic heritage sheds, the launch of the new Queen’s Food Hall in 2023, the Munro community hub development, and pedestrian-friendly streetscape upgrades along Therry Street and Deli Lane.

Town Hall reported in the new document that the current $305.6m funding pool only covers these immediate operational upgrades and does not include any construction funding for the grandest elements of the precinct plan.

Major final phases, including the creation of a 1.8ha public open space known as Market Square and the multi-use Queen’s Corner Building, remain in early planning stages and will require entirely separate, yet-to-be-secured funding sources.

Contractors are currently finalising the construction of the program’s new Trader Shed that is currently 90 per cent complete and on track for delivery in late 2026.

But that centrepiece underground storage facility is already mired in controversy after excavation works hit the local water table, causing significant water leaks in the two lowest basement levels.

Furious market vendors are threatening to boycott the new four-level complex over fears that persistent humidity from the leaks will breed mould in the concrete, rendering the space unusable for fresh fruit, vegetables, meat, and fish.

A City of Melbourne spokeswoman said: “We’re making the biggest investment in Queen Victoria Market’s history – creating better facilities for traders, attracting more visitors and making the market better for everyone.”

“We’re proud to be delivering this major renewal program and look forward to the next milestone, opening the new Trader Shed by the end of the year.”